When I was in Company Manager school, I was taught to never, ever, at the risk of being punished by the ATPAM Gods of Broadway, give money back to an audience member asking for a refund . . . no matter what the reason.  (Yet another way we’re like the airline industry.)

But that was before we entered the Customer Service Era, and while giving money back to anyone asking for a refund in any industry is always a last resort, the real art of protecting your company’s good image is what you do when asked for one.  Because if you drop the ball and disappoint the customer again, you run the risk of that customer running rampant all over the web and slapping your brand in the face with bad word-of-mouth . . . regardless of whether or not you deserve it.

Here are five suggestions of things that I do when I am asked for a refund at any of my shows:

1.  Listen to your customer.

The most important thing you can do with a  customer complaint is listen.  Don’t say a thing.  Just shut your mouth and let them air every single detail of their issue.  Don’t interrupt.  Don’t get defensive.  Just listen.  You can even commiserate if it’s an issue that doesn’t involve your production (i.e. travel issues, etc.).   But let them get it out.  They’ll feel better.

2.  Offer them a chance to come back.

If something about their experience at the theater wasn’t right, give them a chance to come back for free and experience it the right way.  The only potential for lost revenue here is if you’re constantly sold out, and those freebies would prevent a couple of tickets form being sold.  You should obviously try to push them to shows that you know will not sell out, but frankly, if you are sold out all the time . . . do two tickets make that much of a big deal when your brand’s image is at risk?

3.  Give them tickets to another one of your shows.

This tip works especially well for non-profits that are trying to keep customers coming back and back, and who constantly have other shows for people to see.  But I’ve used it many times in the commercial world myself.  If a patron buys tickets to a show and then realizes that they made a mistake, or didn’t understand what they were getting into, I’ll offer them a shot at seeing something else that may be more appropriate for them.  (Depending upon the circumstances, sometimes I’ll try offering a great discount first with “house seat” quality locations, before I go to the comps.)

4.  Give them drinks, merch, and anything else you got.

A refund request is a negotiation like any others.  And often that customer just wants to get something, anything, of value so that they can feel like they were compensated for their complaint.  Give them free t-shirts, or a CD, or a couple of drinks at the bar.  You want them to walk away feeling like a winner.  And by giving them something, anything, they’ll be less likely to lodge an online complaint visible to the world.

5.  Sometimes you gotta do what you swore you would never do.

If you’ve explained your no refund/no exchange policies, if you’ve explained that theater is just like the movies which wouldn’t give you a refund if you didn’t like the movie, or just like the airline industry which doesn’t allow refunds for personal emergencies, if the customer has written a letter, etc. and if you’ve gone through your entire list of refund defenses, and the customer is still adamant about getting money back . . . sometimes it might be better to actually give him his money back.

(If lighting from the ATPAM Gods strike me before I finish this blog, tell my Mom I love her.)

While having a “strict no refund/no exchanges no matter what” policy may have worked twenty years ago, it doesn’t work today.  And by sacrificing a bit of cash to make a problem go away, you may be preventing a ton of lost revenue from bad word of mouth.

And there’s also a macro argument here as well.

I remember hearing a rumor about a Disney policy that allowed their managers to give refunds at their own discretion for whatever the customer’s reason for the request.  Why?  Because the Disney brand is so big, they wanted to insure that the customer continued to support not only its other shows, but the theme parks, the DVDs, and everything else under its umbrella.

Well, I’d argue that the theater umbrella is just as big. While we may not all pool profits like Disney, we should all remember that a bad experience at one show or one theater may affect that customer’s desire to purchase another theater ticket somewhere else.

And as a challenged industry, we have to remember we’re all in this together, and turning off a customer once, may turn them off for a lifetime.

(Whew.  Made it without one bolt.)

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